MANILA, Philippines?The escalating conflict between the administration of President Gloria Macapagal-Arroyo and the Lopez-controlled Manila Electric Co. (Meralco) over high electricity rates scales the summit at a meeting in Bohol Tuesday.
According to deputy presidential spokesperson Anthony Golez, the President had agreed to meet with Manuel Lopez, chair and CEO of Meralco, and Jesus Francisco, the utility?s president, only if the talks ?will revolve around lowering power rates.?
The meeting was set following a defiant interview by Lopez over the Lopez-controlled ABS-CBN Broadcasting Corp., the country?s largest radio-TV network. Lopez said that Winston Garcia, president and general manager of the giant state pension fund, Government Service Insurance System, can buy out all other shareholders of Meralco who wanted to sell, ?but not me.?
Lopez said any decision to sell the family?s controlling shares in Meralco would have to be decided by the family. Lopez gave the interview after Garcia last week announced a takeover bid by the government of Meralco, calling for a change in its management. The takeover bid was promptly called by Oscar Lopez, the family?s patriarch, who dared the GSIS to buy out the family?s shares in Meralco.
On Friday, Manuel Lopez reinforced Oscar Lopez?s challenge, saying he had no quarrel with the government and that he would like to meet the President to discuss the contentious electricity rates and to explain Meralco?s side.
Meralco has been deluged by a barrage of attacks by government officials at the one-sided hearings last week at the Joint Congressional Power Commission (Powercom), chaired by Sen. Miriam Defensor-Santiago and the President?s son Pampanga Rep. Juan Miguel Arroyo, and at the presumably independent Energy Regulatory Commission where the government had lodged omnibus petitions asking the ERC to order Meralco to cut down its rates.
?If it?s just a question of trying to bring down power rates, we are with the government in wanting to bring down the power rates,? Manuel Lopez said.
Underlying issue
In the light of the politicized circumstances surrounding the GSIS bid and the congressional hearings, it is hard to believe that the Arroyo-Lopez summit will be strictly confined to bringing down the rates.
It is also problematic whether the President and Manuel Lopez could avoid the underlying issue of the deeply running political feud between her and the Lopezes, despite Malacańang?s disclaimer that it had nothing to do with Garcia?s moves.
Tuesday?s summit comes ahead of the crucial May 27 annual stockholders? meeting of Meralco, where both Lopez and the GSIS are battling for proxy votes and girding for a showdown for control of the 11-member Meralco board. The meeting is certain to be a test of strength for the government to muster proxy votes to buy out Meralco.
The Lopez family owns 33.4 percent of Meralco?s shares against 33 percent held by the government?23 percent of which is owned by the GSIS. The Lopez group has five seats in the Meralco board to four of the GSIS, with two held by independents. The Lopezes are fighting tooth and nail to retain control of the board, and consequently, Meralco?s management.
Face-to-face confrontation
The Arroyo administration has denied that it is behind the GSIS takeover bid and would like the public to believe that its effort is purely a market-driven initiative and its publicly known stormy political relations with the Lopez family have nothing to do with the GSIS campaign.
But the Arroyo administration also is known to be chafing from the persistent attacks and criticism from ABS-CBN over corruption allegations and its security policies relating to its restrictions on media coverage of political turbulence stemming from coup attempts.
The Bohol summit is the first time that the Arroyo administration is confronting the economic power of the Lopez family, which has during the past 50 years survived attempts to crush it by several post-war governments, notably those of President Diosdado Macapagal, Ms Arroyo?s father, in the 1960s and President Ferdinand Marcos in the 1970s who confiscated Meralco and ABS-CBN with martial law powers. In those battles, the Lopezes fought with their media weapons, something they are now using to damage the present administration, with considerable success.
The current Arroyo-Lopez confrontation is no less fierce and no side is emerging unscathed. The summit in Bohol has far-reaching implications for the balance of power between the political sector?s interventionism in business and autonomy of private sector economic power centers. It is not a battle merely between Ms Arroyo and the Lopezes.
Zero-sum solution
The summit is not expected to focus on bringing down power rates. Details of these issues have been raised at the Powercom hearings, those of the ERC, and the public forums of the media. There?s no doubt that they?re important. The Lopezes must have to answer the numerous allegations of lack of transparency on the contentious power rates.
But in terms of realpolitik, they have to make way for the immediate concerns of the summit. This is about establishing a framework of compromise and a political truce within which some kind of temporary peace in which mechanisms to bring down power rates can be forged. I don?t believe the Bohol summit will produce a zero-sum solution. Continuing hostilities would be mutually destructive.
